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MenuShould hardware startups try to look for and acquire customers who will pre-order the product or should they just grow the hype before the launch?
I've recently joined a hardware startup,the first shipping of their product -which is a cool gadget- will be around November, they have already gone through crowdfunding and all that and have around 150k in pre-orders. Few days ago the CEO of the company told me that they want to change their strategy and focus more on growing the number of followers on social media and the hype around the product until the manufacturing and launch in November and not the actuall sales because he thinks people dont like to wait,he even wants to stop any futther more orders.
i just wanted to see what you guys think,sorry if it got too long
Answers
Hello,
I'm sure everyone has their own approach but in my opinion, not taking orders when there is an obvious demand is ludicrous - BUT there is a way to do it properly to maximize the "hype".
Gaining followers on social media is not as powerful as gaining actual potential buyers. What I would recommend is for you to create a "launch" campaign for the product.
You can run all sorts of ads on social media (Fb, Twitter, etc) to bring people into your own landing page where you tell them about the product (and launch date) and capture their contact information.
Once you add all these people to your mailing list, you can set up an autoresponder sequence specific to the launch which will send them a few e-mails from now until then "preparing them" for the actual date.
If done properly, by the time the launch comes, your customers will be salivating, ready to pull out their credit cards and order the moment the product goes live.
This is a great approach because you keep your potential customers interested without overflowing your business with orders you can't fulfill yet.
Cheers!
P.S. Search for "product launch sequences" so you have a better idea of what I mean.
Unfortunately, your CEO is falling under the spell of "vanity metrics". The idea that the number of fans somehow equates to the number of dollars in the bank.
Pre-orders pay the bills. Facebook Fans, Twitter Followers, YouTube views do little to no good paying the bills.
I'm happy to discuss this with you (to share how you can talk to the CEO about this) or talk with the CEO directly and give a different perspective (so you aren't the bad guy).
Book a call and let's discuss.
-Shaun
I agree with Armando and Shaun, customers bring you revenue, social media followers do now. I would go even further to say that social media followers represent a cost center, an expense, because you need to have a paid employee or a contractor to manage social media followers and keep the brand message consistent.
Businesses exist because they have paid customers. It's that simple. Regarding hardware startups, I just published a case study about FitBit vs Jawbone: http://www.anagard.com/blog/2015/05/06/case-study-bootstrap-vs-venture-funding/ In just three years FitBit took 70% market share for fitness trackers with only $83M in venture capital funding and yesterday they announced $100M IPO even though valuation is $1B. FitBit has to thank paying customers for the success. In contrast, Jawbone, their competitor raised $518M, took 19% market share and is in debt today -- epic fail.
Please call if you and your team need outside feedback.
Customers, not followers, are what makes a business. People are very accustomed to pre-orders these days. As long as you are transparent with them so they have the proper expectations (e.g., you will receive your product in December), then get the pre-orders. You can likely use the pre-orders to increase your followers at the same time.
There is nothing wrong with getting followers, but you need to have a sales and marketing funnel that converts them into buyers. A good product launch plan, as suggested before, should include such a funnel. However, followers for the sake of followers is self-deception.
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